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Exhibit 5
SUPPORT AGREEMENT
SUPPORT AGREEMENT, dated as of December 29, 1995 (this
"Agreement"), by and among WENDY'S INTERNATIONAL, INC., an Ohio corporation
("Wendy's"), 1149658 ONTARIO INC., an Ontario corporation and a subsidiary of
Wendy's (1149658 Ontario Inc. and its successors being referred to herein as
"Newco") and XXXXXX X. XXXXX ("Seller").
W I T N E S S E T H
WHEREAS, pursuant to a Stock Purchase Agreement, dated as of
October 31, 1995, as amended (the "Purchase Agreement"), among Wendy's, Xxxxx,
000000 Xxxxxxx Ltd., an Alberta corporation, continued as 1052106 Ontario Inc.,
an Ontario corporation (the "Company"), and Seller, the parties to the Purchase
Agreement have agreed, subject to the terms and conditions set forth therein,
that Newco will acquire from Seller all of the issued and outstanding shares of
the Company, and Seller shall receive Non-Voting Exchangeable Shares of Newco
(such shares, and shares of any successor corporation having terms substantially
equivalent to those of the Non-Voting Exchangeable Shares of Newco, being
referred to herein as the "Newco Exchangeable Shares");
WHEREAS, Newco's Articles of Incorporation ("Newco's Articles")
set forth the rights, privileges, restrictions and conditions attaching to the
Newco Exchangeable Shares;
WHEREAS, on the date hereof, Wendy's, Newco and Seller have
entered into a Share Exchange Agreement (the "Share Exchange Agreement");
WHEREAS, Wendy's is the registered and beneficial owner of all of
the issued and outstanding common shares of Newco (the "Newco Common Shares");
and
WHEREAS, the parties hereto desire to make appropriate provision
and to establish a procedure whereby Wendy's will take certain actions to enable
Newco to make certain payments and to deliver common shares of Wendy's, without
par value (the "Wendy's Common Shares"), in satisfaction of the obligations of
Newco under Newco's Articles with respect to the payment and satisfaction of
dividends and the Liquidation Amount, all in accordance with Newco's Articles;
NOW, THEREFORE, in consideration of the premises and mutual
covenants and agreements herein contained, the parties agree as follows:
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ARTICLE 1
DEFINITIONS
1.1. DEFINITIONS. Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed thereto in Newco's
Articles.
ARTICLE 2
COVENANTS OF WENDY'S AND NEWCO
2.1. FUNDING OF NEWCO. So long as any Newco Exchangeable
Shares are outstanding and held by Seller, Wendy's shall:
(a) subject to Section 2.7 hereof, not declare or pay any
dividend on the Wendy's Common Shares unless Newco shall
on the same day (or if such day is not a Business Day,
the next succeeding day that is a Business Day) declare
or pay, as the case may be, a dividend on the Newco
Exchangeable Shares as required by the Newco Articles;
(b) subject to Section 2.7 hereof, advise Newco sufficiently
in advance of the declaration by Wendy's of any dividend
on the Wendy's Common Shares and take all such other
actions as are necessary, in cooperation with Newco, to
ensure that the respective declaration date, record date
and payment date for a dividend on the Newco Exchangeable
Shares shall be the same day (or if such day is not a
Business Day, then the next succeeding day that is a
Business Day) as the declaration date, record date and
payment date for the corresponding dividend on the
Wendy's Common Shares;
(c) subject to Section 2.7 hereof, provide or cause to be
provided to Newco, by any means which Wendy's deems
appropriate from time to time, such assets, funds and
other property as may be necessary in order that Newco
will have sufficient assets, funds and other property
available to enable (i) the due declaration and the due
and punctual payment, in accordance with applicable law,
of all dividends on the Newco Exchangeable Shares in
accordance with Newco's Articles and (ii) the due
performance by Newco of its obligations under this
Agreement and the Newco Articles;
(d) subject to Wendy's exercise of the Liquidation Call
Right, take all such actions and do all such things as
are necessary or desirable to enable and permit Newco, in
accordance with applicable law, to pay and otherwise
perform its obligations with respect to the satisfaction
of the Liquidation Amount in respect of each issued and
outstanding
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Newco Exchangeable Share upon the liquidation,
dissolution or winding-up of Newco, including all such
actions and all such things as are necessary or desirable
to enable and permit Newco to deliver Wendy's Common
Shares to the holders of Newco Exchangeable Shares in
accordance with the provisions of Newco's Articles;
(e) subject to Wendy's exercise of the Retraction Call Right,
take all such actions and do all such things as are
necessary or desirable to enable and permit Newco, in
accordance with applicable law, to pay and otherwise
perform its obligations with respect to the satisfaction
of the Retraction Price, including all such actions and
all such things as are necessary or desirable to enable
and permit Newco to deliver Wendy's Common Shares to the
holders of Newco Exchangeable Shares in accordance with
the provisions of Newco's Articles; and
(f) in the event Wendy's shall not have purchased the Newco
Exchangeable Shares pursuant to Article 2 of the Share
Exchange Agreement and Newco shall be required to redeem
the Newco Exchangeable Shares in accordance with Article
7 of Newco's Articles, take all such actions and do all
such things as are necessary or desirable to enable and
permit Newco, in accordance with applicable law, to pay
and otherwise perform its obligations with respect to the
satisfaction of the Redemption Price, including all such
actions and all such things as are necessary or desirable
to enable and permit Newco to deliver Wendy's Common
Shares to the holders of Newco Exchangeable Shares in
accordance with the provisions of Newco's Articles.
2.2. SEGREGATION OF FUNDS. (a) Upon Wendy's providing or
causing to be provided to Newco any funds, assets or other property in
accordance with Section 2.1, Newco shall deposit such funds in a separate
account and segregate such assets and other property, in each case for the
benefit of holders from time to time of the Newco Exchangeable Shares, and will
use such funds, assets and other property exclusively for the payment of
dividends and the payment or other satisfaction of the Liquidation Amount, the
Retraction Price and the Redemption Price.
(b) Newco shall promptly return to Wendy's or its designees,
in accordance with Wendy's directions, any Wendy's Common Shares, assets, funds
or other property delivered to Newco pursuant to this Agreement if, after such
delivery has been made, Newco shall no longer be obligated to deliver such
Wendy's Common Shares, assets, funds or other property, or any part thereof, to
Seller pursuant to the provisions of Newco's Articles or applicable law.
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2.3. NOTIFICATION OF CERTAIN EVENTS. In order to assist
Wendy's to comply with its obligations hereunder, Newco will give Wendy's notice
of each of the following events at the time set forth below:
(a) in the event of any determination by the Board of
Directors of Newco to (i) institute voluntary
liquidation, dissolution or winding-up proceedings with
respect to Newco or (ii) effect any other distribution of
the assets of Newco among its shareholders for the
purpose of winding-up its affairs, at least 60 days prior
to the proposed effective date of such liquidation,
dissolution, winding-up or other distribution;
(b) immediately, upon the earlier of the receipt by Newco of
notice of, or Newco otherwise becoming aware of, any
instituted claim, suit, petition or other proceedings
with respect to the involuntary liquidation, dissolution
or winding-up of Newco or to effect any other
distribution of the assets of Newco among its
shareholders for the purpose of winding-up its affairs;
(c) immediately, upon receipt by Newco of a Retraction
Request;
(d) immediately upon sending a notice to the holders of Newco
Exchangeable Shares pursuant to the first sentence of
Section 7.2 of Newco's Articles; and
(e) as soon as practicable upon the issuance by Newco of any
Newco Exchangeable Shares or rights to acquire Newco
Exchangeable Shares (other than the issuance of Newco
Exchangeable Shares pursuant to the Purchase Agreement).
2.4. DELIVERY OF WENDY'S COMMON SHARES. In furtherance of its
obligations under Section 2.1(d) hereof (but subject to the exercise by Wendy's
of the Liquidation Call Right and the Retraction Call Right and the purchase of
Newco Exchangeable Shares by Wendy's pursuant to Article 2 of the Share Exchange
Agreement), upon notice from Newco of any event which requires Newco to deliver
Wendy's Common Shares to any holder of Newco Exchangeable Shares pursuant to
Newco's Articles, Wendy's shall forthwith issue and deliver the requisite
Wendy's Common Shares to Newco so that Newco can then deliver such shares to
such holder of the surrendered Newco Exchangeable Shares in accordance with
Newco's Articles. All such Wendy's Common Shares shall be duly issued as fully
paid and non-assessable and shall be free and clear of any lien, claim or
encumbrance, other than any escrow requirements imposed by the Escrow Agreement
(as such term is defined in the Purchase Agreement). In consideration of the
delivery of such Wendy's Common Shares by Wendy's to Newco, Newco shall deliver
to Wendy's one common share of Newco.
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2.5. WENDY'S NOT TO VOTE NEWCO EXCHANGEABLE SHARES. Wendy's
covenants and agrees that it will appoint and cause to be appointed proxyholders
with respect to all Newco Exchangeable Shares held by Wendy's and its
subsidiaries (as such term is defined in the Purchase Agreement) for the sole
purpose of attending each meeting of holders of Newco Exchangeable Shares in
order to be counted as part of the quorum for each such meeting. Wendy's further
covenants and agrees that it will not, and will cause its subsidiaries not to,
exercise any voting rights which may be exercisable by holders of Newco
Exchangeable shares from time to time pursuant to Newco's Articles or pursuant
to the provisions of the Business Corporations Act (Ontario) (or any successor
or other corporate statute by which Newco may in the future be governed) with
respect to any Newco Exchangeable Shares held by it or its subsidiaries in
respect of any matter considered at any meeting of holders of Newco Exchangeable
Shares.
2.6. TENDER OFFERS, ETC. In the event that a tender offer,
share exchange offer, issuer bid, take-over bid or similar transaction with
respect to shares of Wendy's Common Shares (an "Offer") is proposed by Wendy's
or is proposed to Wendy's or its shareholders and is recommended by the Board of
Directors of Wendy's, or is otherwise effected or to be effected with the
consent or approval of the Board of Directors of Wendy's, Wendy's will use its
best efforts to take all such actions and do all such things as are necessary or
desirable to enable and permit holders of Newco Exchangeable Shares to
participate in such Offer to the same extent and on an economically equivalent
basis as the holders of Wendy's Common Shares, without discrimination. Without
limiting the generality of the foregoing, Wendy's will use its best efforts to
ensure that holders of Newco Exchangeable Shares may participate in all such
Offers without being required to exchange with Wendy's Newco Exchangeable Shares
for Wendy's Common Shares (or, if so required, to ensure that any such exchange
shall be effective only upon, and shall be conditional upon, the closing of the
Offer and only to the extent necessary to tender or deposit to the Offer).
2.7. CERTAIN DIVIDENDS. So long as any Newco Exchangeable
Shares are outstanding and held by Seller, if Wendy's shall declare dividends on
the Wendy's Common Shares, the record date for which shall occur prior to the
date on which Newco's assets shall be distributed to its shareholders in
connection with the liquidation, dissolution or winding up of Newco, whether
voluntary or involuntary, and the distribution date with respect to such
dividends shall occur after such date, Wendy's shall not be bound by the
provisions of Section 2.1(a) through (c); provided, however, that Seller shall
be entitled to receive payment of such dividends from Wendy's to the same extent
as if he had been a holder of the Specified Number of Wendy's Common Shares on
the record date for such dividends with respect to each Newco Exchangeable Share
held by him immediately prior to the date on which Newco's assets are
distributed to its shareholders in connection with such liquidation, dissolution
or winding up of Newco.
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ARTICLE 3
GENERAL
3.1. TERM. This Agreement shall come into force and be
effective as of the date hereof and shall terminate and be of no further force
and effect at such time as no Newco Exchangeable Shares (or securities or rights
convertible into or exchangeable for or carrying rights to acquire Newco
Exchangeable Shares) are held by any party other than Wendy's and any of its
subsidiaries.
3.2. CHANGES IN CAPITAL OF WENDY'S AND NEWCO. At all times
after the occurrence of any event in which either the Wendy's Common Shares or
the Newco Exchangeable Shares or both are in any way changed, this Agreement
shall forthwith be amended and modified as necessary in order that it shall
apply with full force and effect, mutatis mutandis, to all new securities into
which Wendy's Common Shares or the Newco Exchangeable Shares or both are so
changed and the parties hereto shall execute and deliver an agreement in writing
giving effect to and evidencing such necessary amendments and modifications.
3.3. AMENDMENTS AND SUPPLEMENTS. This Agreement may not be
amended, modified or supplemented by the parties hereto in any manner, except by
an instrument in writing signed on behalf of Wendy's and Newco by their duly
authorized officers or representatives and by Seller.
3.4. CONSEQUENTIAL AMENDMENTS. Notwithstanding the provisions
of Section 3.3, Wendy's and Newco may in writing, at any time and from time to
time, without the approval of Seller, amend or modify this Agreement for the
purposes of:
(a) adding to the covenants of either or both parties for the
protection of the Seller; or
(b) making such amendments or modifications not inconsistent
with this Agreement as may be necessary or desirable with
respect to matters or questions which, in the opinion of
the Board of Directors of each of Newco and Wendy's, it
may be expedient to make, provided that such amendments
or modifications will not be prejudicial to the interests
of the holders of the Newco Exchangeable Shares; or
(c) making such changes or corrections which, on the advice
of counsel to Newco and Wendy's, are required for the
purpose of curing or correcting any ambiguity or defect
or inconsistent provision or clerical omission or mistake
or manifest error, provided that such changes or
corrections will not be prejudicial to the interests of
the holders of the Newco Exchangeable Shares.
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3.5. NO WAIVER. The failure of any party hereto to enforce at
any time any of the provisions of this Agreement shall in no way be construed to
be a waiver of any such provision, nor in any way affect the validity of this
Agreement or any part hereof or the right of such party thereafter to enforce
each and every such provision. No waiver of any breach of or non-compliance with
this Agreement shall be held to be a waiver of any other or subsequent breach or
non-compliance.
3.6. GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of Ontario (and the laws of
Canada applicable therein), without regard to their respective conflict of law
rules.
3.7. NOTICE. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered in person or sent by
facsimile or via a reputable international overnight courier service to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice), and shall be deemed given on the date on
which delivered by hand or otherwise on the date of receipt:
If to Wendy's or Newco:
Wendy's International, Inc.
X.X. Xxx 000
0000 Xxxx Xxxxxx-Xxxxxxxxx Xxxx
Xxxxxx, Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
With a copy to:
Lang Xxxxxxxx
XXX Xxxxx, Xxxxx 0000
X.X. Xxx 000
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxx Xxxxx, Esq.
Facsimile No.: (000) 000-0000
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and
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to Seller:
Xx. Xxxxxx X. Xxxxx
00 Xxxx Xxxxx Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Facsimile Number: (000) 000-0000
With a copy to:
Tory Xxxx XxxXxxxxxxx & Binnington
Suite 3000 Aetna Tower
X.X. Xxx 000
Xxxxxxx-Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attn.: Xxxxxx Xxxxxxx, Esq., Q.C.
Facsimile Number: (000) 000-0000
3.8. CONSTRUCTION OF AGREEMENT. A reference to an Article or a
Section shall mean an Article of or a Section in this Agreement unless otherwise
expressly stated. The titles and headings herein are for reference purposes only
and shall not in any manner limit the construction of this Agreement which shall
be considered as a whole. The words "include," "includes" and "including" when
used herein shall be deemed in each case to be followed by the words "without
limitation."
3.9. ENTIRE AGREEMENT, ASSIGNABILITY, ETC. This Agreement
constitutes the entire agreement, and supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof. This Agreement is not intended to confer upon any person
other than the parties hereto any rights or remedies hereunder, except as
otherwise expressly provided herein, and shall not be assignable by operation of
law or otherwise.
3.10. VALIDITY. The invalidity or unenforceability of any
provisions of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, each of which shall remain in full force
and effect.
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3.11. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which together shall constitute one and the same
Agreement.
3.12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
on the legal representatives, successors and permitted assigns of the parties
hereto.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the date first above written.
WENDY'S INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxx
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Title: President, Chief Executive Officer
and Chief Operating Officer
1149658 ONTARIO INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------
Title: Chairman of the Board and President
/s/ Xxxxxx Xxxxx /s/ Xxxxxx X. Xxxxx
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Witness to the signature of XXXXXX X. XXXXX
Xxxxxx X. Xxxxx
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